State Consumer Disputes Redressal Commission
Sukhwinder Singh vs Unitech Ltd. on 14 June, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
(Exercising the Powers of Judicial Magistrate Ist Class conferred
under Section 27(2) of the Consumer Protection Act, 1986).
Execution Application No.78 of 2016
In
Consumer Complaint No.95 of 2015
Date of Institution: 29.11.2016.
Date of Decision : 14.06.2017.
Sukhwinder Singh son of S.Kehar Singh resident of House No.3296, PGI
Society, Sector 49, Chandigarh.
......Applicant/DH/Complainant
Versus
1. Unitech Limited, Regd. Office 6, Community Centre, Saket, New Delhi,
through its Managing Directors, Ajay Chandra and Sanjay Chandra.
2. Unitech Limited (Uniworld City Mohali), Marketing Office at SCO-189-
90-91, Sector 17, Chandigarh through its Authorized Officer Ajay
Chandra.
3. Alice Developer's Pvt. Ltd. Registered office at Basement 6,
Community Centre, Saket, New Delhi, through its Managing Director
Sanjay Hingorani and Satbir Singh Yadav.
......Respondents/JDs/Opposite parties.
Execution Application under Section 27 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Harcharan Singh Guram, Member
Present:-
For the applicant-DH : Sh.R.S.Jhand, Advocate For respondents/JDs No.1&2: Ms.Vertika H.Singh, Advocate For respondent/JD No.3 : None JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT This Execution Application has been filed by the applicant- complainant, under Section 27 of the Consumer Protection Act, 1986 (in short, the Act"), against the respondents-JDs for non-compliance of the order dated 12.09.2016 passed by this Commission in the above mentioned Consumer Complaint.
2. Briefly stated, allured by the advertisement published by the JDs, the complainant purchased a residential flat vide Customer Code GDM0015 Property No. Block - A1, Floor 03, Flat No.0303, measuring 1485 sq.ft. alongwith car parking etc. for a total consideration of E.A. No. 78 of 2016 In C.C. No. 95 of 2015 2 Rs.39,96,900/- on 01.12.2010 and thereafter Buyer's Agreement was signed on 14.04.2011, vide which, the possession of the flat was to be delivered within 36 months from the date of that Agreement. The complainant/DH had paid a total amount of Rs.43,64,000/- against the sale price of the said flat. However, the possession of the flat was not delivered to him by the respondents/JDs even upto the date of filing of the complaint. When he enquired for the reasons for the non-construction/development of the building, the respondents-JDs and its officials made excuses on one pretext or the other and failed to give any satisfactory reply. There is no sign of the basic amenities at the site as assured at the time of booking. The possession of the said flat was not delivered by the respondent/JD, despite repeated requests by the applicant-complainant, which compelled the decree holder/complainant to file Consumer Complaint bearing No.95 of 2015, in which after service of notice, the respondents/JDs appeared and denied all the allegations and prayed for dismissal of the complaint with costs. However, the complaint was allowed in favour of the complainant/DH, vide order dated 12.09.2016, granting following relief:-
i) to refund the sum of Rs.43,64,000/-, along with interest at the rate of 12% per annum from the date of payment of different amounts till the date of payment;
ii) to pay Rs.3,50,000/-, as compensation for the harassment and mental agony suffered by the complainant; and
iii) to pay Rs.11,000/-, as litigation expenses.
3. Compliance of the said order was to be made by the respondents/JDs within a period of 30 days of the receipt of certified copy thereof. However, the respondents/JDs failed to comply with the same E.A. No. 78 of 2016 In C.C. No. 95 of 2015 3 within the stipulated period, which compelled the decree holder/complainant to file the above execution application under Section 27 of the Consumer Protection Act, 1986, to award punishment to the respondents/JDs, as per law.
4. This Execution Application came up for hearing on 08.12.2016. In compliance of order dated 02.09.2016 passed by Hon'ble High Court of Delhi in the application under Section 391(1) of the Companies Act, 1956 staying the execution proceedings against the judgment debtors/respondents till further orders, the execution proceedings were adjourned sine die. On 18.01.2017, on the application of the applicant, wherein the Hon'ble Apex Court directed the proceedings pending before all the Forums shall continue, vide its order dated 15.12.2016. Notice was issued to the respondents-judgment debtors for 06.03.2017. On 06.03.2017, Ms.Vertika H. Singh, Advocate, appeared on behalf of the respondents-JDs No.1&2. As per report Registry, notice sent to the respondents No.3/JDs No.3 not received back and none had appeared on behalf of the respondents No.3/JDs No.3. Show Cause Notice under Section 251 read with Section 262 of the Code of Criminal Procedure, 1973 was issued to the following respondents/JDs :
a) Unitech Limited, Regd. Office 6, Community Centre, Saket, New Delhi, through its Managing Directors, Ajay Chandra and Sanjay Chandra.
b) Unitech Limited (Uniworld City Mohali), Marketing office at SCO-189-90-91, Sector 17, Chandigarh through its authorized officer Ajay Chandra.
c) Alice developer's Pvt. Ltd. Registered office at Basement 6, Community Centre, Saket, New Delhi, through its Managing Director Sanjay Hingorani and Satbir Singh Yadav.
through the counsel for the respondents/JDs, directing herto put its defence or state whether the respondents/JDs were ready to comply with the E.A. No. 78 of 2016 In C.C. No. 95 of 2015 4 aforesaid order passed in above mentioned complaint and plead guilty or not of non-compliance.
5. On 28.03.2017, learned counsel for the parties stated that there is a possibility of settlement between the parties and sought one more opportunity to explore the possibility of settlement and the case was adjourned to 26.04.2017 for further proceedings. In-spite of service of Show-cause Notice upon the respondents/JDs No.1&2, the order of this Commission was not complied with and, vide order dated 26.04.2016, Bailable Warrants were issued against the Managing Director of the respondents/JDs in the sum of Rs.50,000/- with one surety in the like amount for 31.05.2017, through the S.S.P. Chandigarh and S.S.P. Gurgaon. The Bailable Warrants sent through SSP Chandigarh received back unexecuted whereas bailable warrants sent to SSP, Gurgaon were not received back.
6. On 31.05.2017, learned counsel for the respondents/JDs prayed that one opportunity be given to show the bonafide of the opposite parties. She was given one more opportunity with the direction to bring demand draft of Rs.20,00,000/- in the name of the decree holder for handing over to the applicant/DH on the adjourned date. She was further directed that the company be informed that senior authorized signatories/functionaries be present on the date fixed and the case was adjourned for today i.e. 14.06.2017 for further proceedings. But the said order has not been complied with.
7. The fact remains that there is no stay order against order dated 12.09.2016 passed by this Commission. At the time of arguments also E.A. No. 78 of 2016 In C.C. No. 95 of 2015 5 learned counsel for the respondents/JDs failed to place on record any order passed by the Appellate Fora, staying execution of the order impugned. Under these circumstances, the order passed on 12.09.2016 has become final. It is also proved on record that the respondents/JDs have failed to comply with the directions issued by this Commission in the order under execution. Under above circumstances, the respondents/JDs are liable to suffer punishment and penalty, in terms of Section 27 of the Act, which clearly envisages that, in case, a person, against whom an order has been passed, omits to comply with the same, he or she can be punished with imprisonment for a term, which may extend to three years and fine can also be imposed.
8. The fact remains that the respondents/JDs are a company and, as such, the question is whether, a company can be sentenced of imprisonment or only a fine can be imposed on the company?
Under Section 2 (m) of the Act, the "person" has been defined as under:
"person" includes,--
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a co-operative society;
(iv) every other association of persons whether registered
under the Societies Registration Act, 1860 (21 of 1860) or not;
Section 27 of the Act is reproduced as follows:-
Penalties. -- (1)Where a trader or a person against whom a complaint is made or the complainant fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person or complainant shall be punishable with imprisonment for a term which shall not be less than one month but which may E.A. No. 78 of 2016 In C.C. No. 95 of 2015 6 extend to three years, or with fine which shall not be less than two thousands rupees but which may extend to ten thousand rupees, or with both:
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on such conferment of powers, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973 (2 of 1974).
(3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission, as the case may be.
From the perusal of Section 27 read with Section 2 (m) of the Act, it is clear that a Company can be prosecuted and punished for the offence committed under Section 27 of the Act. The sentence of imprisonment, which can be imposed thereunder, cannot be imposed, the respondents/JDs company being a juristic person. This Commission would be shirking in its duties of imparting justice by holding that prosecution of a company is unsustainable, merely on the ground that being a juristic person, it cannot be sent to jail to undergo sentence as under Section 27 of the Act, sentence of imprisonment for a term not less than one month, but which may extend to three years, or with fine which shall not be less than Rs.2,000/-, but which may extend to Rs.10,000/- or with both, can be imposed. The Companies are indulging in various types of works and have huge sources and finances at their command, which they collect from the innocent consumers and during the course of business activities, they commit breach of the law of the land. Certainly, it would be against the settled principle of justice, if such Companies are allowed to go scot-free. E.A. No. 78 of 2016
In C.C. No. 95 of 2015 7 Furthermore, the perusal of definition of 'person' under Section 11 of the Indian Penal Code also covers the 'natural person' and the 'juristic person'. Though not relevant here, Section 2 (m) of the Act itself includes the Company in the definition of 'person' and Section 27 also states that a trader or person, against whom a complaint is made, fails or omits to comply with the order made by the District Forum, State Commission or National Commission, as the case may be, such trader or person shall be punishable with imprisonment for a term specified in the said Section. Certainly, the Company can also be held guilty and sentence can be imposed.
9. The Full Bench of the Hon'ble Delhi High Court in Municipal Corporation of Delhi v. J.B. Bottling Company Private Limited ILR 1975 Delhi 739 held as under:
"(42) It is, therefore, held that a company as defined in Section 17 of the Prevention of Food Adulteration Act, 1954, does not enjoy immunity from prosecution when under the said Act it is alleged to have committed an offence to which the proviso to sub-
section (1) of Section 16 is not applicable; and, in case such a company is found guilty of such an offence, it can be punished with fine."
10. Similarly, identical view was taken by the Hon'ble Madras High Court in case Fidelity Industries Ltd. v. State 2006 (1) CTC 374.
11. Furthermore, the Hon'ble Supreme Court in case Standard Chartered Bank & Ors. v. Directorate of Enforcement & Ors. AIR 2006 Supreme Court 1301 has held in Para No.29 as follows: E.A. No. 78 of 2016
In C.C. No. 95 of 2015 8 "29. There does not appear to be any reason to confine the operation of Section 68 of the Act as was done by the High Court.
Merely because the expression 'punished' is used, it does not mean that it is confined to a prosecution under Section 56 of the Act, since the element that attracts the imposition of penalty and the prosecution is the same, namely, the contravention of any of the provisions of the Act. Moreover, there is nothing in the Act which confines the expression 'punished' only to a punishment for a criminal prosecution. An imposition of a penalty can also be a punishment. The second part of the reasoning appears to be self- contradictory. If a person includes a company, there is no reason to confine Section 68 to a prosecution only, because the company as a person is liable to be proceeded against under Section 50 and Section 56 of the Act, though in a criminal prosecution the punishment by way of imprisonment can be imposed only on the officer or officers of the company referred to inSection 68 of the Act. Section 68 only indicates the manner in which a contravention by a company can be dealt with and it does not show that it is confined in its operation only to prosecutions against a company. It is a general provision relating to a contravening company, which is to be proceeded against whether it be under Section 50 or under Section 56 of the Act. The fact that a fine alone can be imposed on a company in a prosecution under Section 56 of the Act, cannot enable us to confine the operation of Section 68 to criminal prosecutions alone under the E.A. No. 78 of 2016 In C.C. No. 95 of 2015 9 Act. We see no reason to whittle down the scope of Section 68 of the Act."
In the said decision, the Hon'ble Supreme Court expressly overruled the decision in Assistant Commissioner, Assessment-II, Bangalore & Ors. v. Valliappa Textiles Ltd. and Another ( 2003) (11) SCC 405 and held that there is no immunity to the Companies from prosecution, merely because the prosecution is in respect of an offence, for which the punishment prescribed is imprisonment and fine or fine, or both.
12. In view of the law laid down in the aforesaid cases, the legal position, as stands today, is that the prosecution can be initiated against a Company and fine can be imposed, even when the imprisonment given is mandatory punishment with fine. Now, the Corporate Sector is indulging in all types of business. Undoubtedly, they rule the world now a days; as a result of which, there is a rise in crime by Corporate Bodies.
13. In view of above discussion as well as the law laid down in the above noted authorities, we are of the view that since the respondents /JDs Company has failed to comply with the order, it is liable to be punished with fine only for the disobedience of the order passed by this Commission in the complaint.
14. Accordingly, for wilful disobedience of the order passed by this Commission in Consumer Complaint No.95 of 2015, it is directed as under:
a) Unitech Limited, Regd. Office 6, Community Centre, Saket, New Delhi, through its Managing Directors, Ajay Chandra and Sanjay Chandra.
b) Unitech Limited (Uniworld City Mohali), Marketing office at SCO-
189-90-91, Sector 17, Chandigarh through its authorized officer Ajay Chandra; and E.A. No. 78 of 2016 In C.C. No. 95 of 2015 10
c) Alice developer's Pvt. Ltd. Registered office at Basement 6, Community Centre, Saket, New Delhi, through its Managing Director Sanjay Hingorani and Satbir Singh Yadav. are held guilty of the offence punishable under Section 27 of the Consumer Protection Act, 1986 and is directed to pay a fine of Rs.10,000/-.
15. Certificate of recovery of fine of Rs.10,000/- from the Respondents/JDs, as ordered above,along with the certified copy of the order dated 12.09.2016 passed in Consumer Complaint No.95 of 2015, be sent to the District Collector, New Delhi, Chandigarh and to submit their report.
16. Certified copy of this order be sent to the Decree- Holders/complainants free of charge.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER June 14, 2017 Lb/-